Running before i can walk or slacking off???

Tink_04

well here we go im a little confused as not sure if im going the right way about things but this is whats going on so far:

Me and DH sat down last night and had a good talk about £££ and what is going on at the moment we talked about how were in the mess were in and how this time its going to be different and although its great to be open and honest about these things i cant help but think maybe were not going about it the right way?

Ok we dont spend spend spend on CC or anything like that and we dont have flash cars or big holidays or even loads of new clothes out biggest link off debt is car failing its MOT (670 CC) - boiler totally dies (400) CC - roof leaked needed new flat roof and repair work to main roof (2000) large baby items that we thought we could spread the cost over (500) etc so DH thinks we need to look at our everyday living and spend a few months budgeting - organising our accounts and also put some money aside for these things incase they happen yet im worried that after a few months he will loose interest and we may go back to our old ways!

We have only a small income and live month to month at the moment and i have already set up some new accounts so we can budget better ie shopping, bills and xmas accounts and this is great i love that were getting somewhere but i feel like we should be PAYING more things or am i running before i can walk?? DH thinks this is the case and thinks in order for it too work long term we need to start from scratch..

Id love to hear people thoughts on this as im really confused?

Tink

[Deleted User]

Hi Tink,

It seems that you are becoming organised. Have you done an SOA yet so that you know exactly what's coming in and going out? If you post one here, people will be able to give you advice on where any savings can be made.

Here's the link: http://www.makesenseofcards.com/soacalc.html

D9

Tink_04

Thanks i have done one before *goes to dig it out*

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 560
Partners monthly income after tax....... 950
Benefits................................ 550
Other income............................ 0
Total monthly income.................... 2060

Monthly Expense Details
Mortgage................................ 458
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 97
Electricity............................. 37
Gas..................................... 47
Oil..................................... 0
Water rates............................. 26.88
Telephone (land line)................... 11
Mobile phone............................ 42
TV Licence.............................. 12
Satellite/Cable TV...................... 55
Internet Services....................... 0
Groceries etc. ......................... 125
Clothing................................ 5
Petrol/diesel........................... 70
Road tax................................ 2.9
Car Insurance........................... 48.85 - DUE IN APRIL WILL BE 25 SO SHOULD DROP!
Car maintenance (including MOT)......... 7
Car parking............................. 0
Other travel............................ 44
Childcare/nursery....................... 449.15 - GOING UP AGAIN IN APRIL SO WILL NEED TO RE ADJUST
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 9
Buildings insurance..................... 30.12 - JUST RENEWED IS NOW £24.15 + £40 CASH BACK THROUGH QUIDCO
Contents insurance...................... 0-IN WITH THE BUILDINGS
Life assurance ......................... 35
Other insurance......................... 9 - TV COVER
Presents (birthday, christmas etc)...... 20 - NEED TO ADD MORE TO THIS
Haircuts................................ 5
Entertainment........................... 0
Holiday................................. 10
Emergency fund.......................... 0
Total monthly expenses.................. 1655.9


Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 91500


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 97000....(458)......0
Total secured & HP debts...... 97000.....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR
egg............................560.......15....... .0
halifax OD.....................490.......15........0
Natwest CC.....................980.......50........0
Halifax........................5000......160...... .0 - THIS HAS PPI ON THAT I HAD NO IDEA ABOUT
HSBC loan......................2000......100.......0
Total unsecured debts..........9030......340.......-


Monthly Budget Summary
Total monthly income.................... 2,060
Expenses (including HP & secured debts). 1,655.9
Available for debt repayments........... 404.1
Monthly UNsecured debt repayments....... 340
Amount left after debt repayments....... 64.1

Personal Balance Sheet Summary
Total assets (things you own)........... 91,500
Total HP & Secured debt................. -97,000
Total Unsecured debt.................... -9,030
Net Assets.............................. -14,530

[Deleted User]

Thanks i have done one before *goes to dig it out*

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 560 (Any way to increase? Overtime second job?)
Partners monthly income after tax....... 950 (Any way to increase? Overtime, second job?)
Benefits................................ 550
Total monthly income.................... 2060

Monthly Expense Details
Mortgage................................ 458
Council tax............................. 97 (Can you spread this over 12 months instead of the usual 10?)
Electricity............................. 37 (Check online comparison sites to see if switchig would be cheaper - try USwith - often online and duel fuel packages are cheaper)
Gas..................................... 47 (as above)
Water rates............................. 26.88
Telephone (land line)................... 11
Mobile phone............................ 42 (This is quite high, especially as you also have a landline phone - are you in contract? If so see if you can drop a tariff, if out of contract look at SIM only, or PAYG)
TV Licence.............................. 12
Satellite/Cable TV...................... 55 (You could drop to the basic package, or go Freeview)
Internet Services....................... 0
Groceries etc. ......................... 125
Clothing................................ 5
Petrol/diesel........................... 70
Road tax................................ 2.9
Car Insurance........................... 48.85 - DUE IN APRIL WILL BE 25 SO SHOULD DROP! (At renewal check comparison sites)
Car maintenance (including MOT)......... 7
Other travel............................ 44
Childcare/nursery....................... 449.15 - GOING UP AGAIN IN APRIL SO WILL NEED TO RE ADJUST (Do either of you get the option of childcare vouchers through your employer?)
Pet insurance/vet bills................. 9
Buildings insurance..................... 30.12 - JUST RENEWED IS NOW £24.15 + £40 CASH BACK THROUGH QUIDCO
Contents insurance...................... 0-IN WITH THE BUILDINGS
Life assurance ......................... 35
Other insurance......................... 9 - TV COVER (Is this necessary? Will it not be covered in your contents insurance?)
Presents (birthday, christmas etc)...... 20 - NEED TO ADD MORE TO THIS
Haircuts................................ 5
Entertainment........................... 0 (nothing?)
Holiday................................. 10
Emergency fund.......................... 0
Total monthly expenses.................. 1655.9


Assets
Cash.................................... 0
House value (Gross)..................... 90000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 91500


Secured & HP Debts
Description....................Debt......Monthly.. .APR
Mortgage...................... 97000....(458)......0
Total secured & HP debts...... 97000.....-.........-

Unsecured Debts
Description....................Debt......Monthly.. .APR (You need to find out what the APR's are on these debts
egg............................560.......15....... .0 - (Any surplus you have should go towards the debt that's charging you the most)
halifax OD.....................490.......15........0
Natwest CC.....................980.......50........0
Halifax........................5000......160...... .0 - THIS HAS PPI ON THAT I HAD NO IDEA ABOUT (Claim this back - there are several threads on here that will give you advice on how to do this)
HSBC loan......................2000......100.......0
Total unsecured debts..........9030......340.......-

Monthly Budget Summary
Total monthly income.................... 2,060
Expenses (including HP & secured debts). 1,655.9
Available for debt repayments........... 404.1
Monthly UNsecured debt repayments....... 340
Amount left after debt repayments....... 64.1 Do you actually have this at the end of every month? If not, keep a spending diary to see where it goes - if you do have it you it to overpay on the debt that's costing you the most in interest (the one with the highest APR)

Personal Balance Sheet Summary
Total assets (things you own)........... 91,500
Total HP & Secured debt................. -97,000
Total Unsecured debt.................... -9,030
Net Assets.............................. -14,530

Hi,

I have made some comments above - hopefully they're not all comments that yu have already had, and that some of them will be of use to you.

It seems that you are doing the right things, and you're headed in the right direction.

Good luck on your debt free jounrey.

D9

MrsTinks

OK just a small point - please don't count on your car insurance dropping when you're 25 - sorry to be the one to point it out but all car insurances have gone up and it looks like cheaper insurance for women might be a thing of the past... apparently it was discriminatory or something so it might have an impact on ALL womens car insurance by rather a lot... so for now budget at least the same amount for when renewal comes around... It's all linked to a case in the european courts with a judgement due on the 1st of March... might not happen but it looks likely...

Tink_04

Hi thanks for the advice what do you think about what DH is proposing tho? do you think its a good idea or should we be focusing out attention elsewhere?

Tink

[Deleted User]

Me and DH sat down last night and had a good talk about £££ and what is going on at the moment we talked about how were in the mess were in and how this time its going to be different and although its great to be open and honest about these things i cant help but think maybe were not going about it the right way?

Hi Tink, It seems like your OH has a good idea in theory, but there's little point saving huge amounts into an emergency pot whilst you still have expensive debts - (the debts are costing you far more than you would earn in a savings account) but yes a little is sensible - even £10 every month will help to give you both a bit of peace of mind. But you have to be disciplined and keep it for a real emergency - My OH would probably define not having a take away an emergency!!!

It might also be worth investigating boiler cover. And perhapse open a seperate account for your next MOT (divide what you paid this year by 12 and save this every month. If it works out less next time (fingers crossed), then you can either throw it at your debts (if they're not paid off), keep it for the following year, or treat yourself.

Don't forget to claim back your PPI, this could knock a bit off the debt that's costing you the most.

Hope that answers your question,

D9

wannabeasupersaver

In our household we have decided to go down the saving AND paying route. I know we pay more in the long run by not clearing debts quicker but our spending on cc and loans had become a way of life, not just emergencies. Having never really budgeted before ( in the beginning we had cash enough not to worry) we wouldn't 'save' for stuff we'd just pay for it, hence the increase in our debt. Since becoming more money conscience we are budgeting properly which includes saving for emergencies. I have little interest in savings interest rates at the moment I just need to put enough away to feel secure that if something cropped up then I wouldn't have to reach for the cc or extend the loan (again!) Think its more pyschological than anything else. Im pround that I haven't taken my credit card out of its hiding place since our LBM :j and I don't want to. We are paying more off now too with our debts. Always pay min balance on cc's then try if we can to pay the estimated interest for the next month as well. Hasn't happened this month as DH has changed jobs mid month (for a better one :T) so it meant this end of month pay was less than normal and his new job has required him to go away from home training so have had to find money for this too (not so good- will get it back eventually but doesn't help this month! Roll on end of March :beer:) Anyway I digress, personally I think it depends on what works best for you and your family. There are pros and cons to saving some and paying more.

Tink_04

Thanks for replying! D9 we used to have boiler cover might look into it again as it should have a service too really & wannabeasupersaver thats great your DH is starting a better job & i hope i have the restraint you do with the CC!!! But i am still really torn i can understand the lifestyle change we need so think the budgeting and planning is a really important factor but do worry as we have so little to play with each month DH thinks its the best plan and is upset im not 100% on board and he doesnt see it as saving he sees it as planning for xmas and planning for the things that will crop up in life! We have decided to sit and work a full budget sheet out and see what is going in and out and see what we can do and decide from there - i dont want to seem like im not with his ideas but im very wary of it all being great in theory! I have drafted a letter to send for my PPI claim and will post this once ive printed it off when back at work next week (no printer) as that would help massively towards things - on a plus note tho i got paid and separated the money into all the new accounts so everything is covered this month and although i cried last night about how little money there is to go round and how we will afford stuff i feel good knowing a start has been made in some way!

7roland8

Hi Tink - just quick reply.
Firstly our car insurance has gone up about 20% - so be prepared.
Also if I were in your shoes and sort of are) -I would be trying to economise as much as possible and using al the spare cash to pay off the credit cards. Don't worr about saving until they're cleared - if worse comes to worst you can laways use a card - but only if unavoidable. You'll be pleased as you see the amounts owed dropping.

Clarie_2

Hi Tink04
I think I'm with your husband on this - if you have forseeable expenses (dodgy boilers and MOTs, Christmas etc) then yes, they need to be in your budget and you need to be preparing in advance.
Whilst generally the 'don't save till debt clear' advice is good, for forseeable stuff it actually works to save up for it. For example, if over the year I save up £100 for Christmas, even at rubbish interest (0.2% or whatever) then I'm not spending £100 at December on a credit card, at potentially 20%. Of course incredibly savvy people could make this work much better but then they don't tend to be living on our debt knife edge!
Also, stuff like car insurance and tax is cheaper if paid up front in full - possible when you put aside money each month for it.
What isn't worth doing is building up long term savings - house deposits, etc etc as your rate of interest is not only less than on debts but at the moment, less than the cost of living.

Each month, a huge chunk goes to our house account for bills this month (rent and bills and food). Another chunk goes to the debt account (for our standing orders to debts payments). Another chunk goes to the annual savings pot (car insurance, MOT, Christmas). And then whatever is left is ours to use as we've budgeted - petrol, going out, clothes, etc. And no, it's not much to play with at all, but I think that's the point - everything that went to the other pots never was ours to play with really anyway.

So hmm, I think I'd say back your husband up 100%, go for it whole heartedly, and book in a review date in a couple of months time to see how it's gone! If it doesn't work, you can adjust your system then.

Clarie